"The consensus holds that AI will inevitably deliver large productivity gains and that's powered deals worth hundreds of billions of dollars into a throwback, 19th-century style (or late 1990s-style) infrastructure boom. This has led to fears of bubble formation, with even Jeff Bezos saying recently it's "kind of an infrastructure bubble," not one purely driven by financial speculation, and it will pay off for years, even generations."
""It seems you can't go anywhere without talking about AI," according to Aditya Bhave, senior U.S. economist at Bank of America Research, whose team tackled the subject on Friday. "AI: it's what everyone is talking about," they said. In BofA's client discussions, according to Bhave's team, "one of the most frequently discussed topics is AI and what it means for growth, productivity, and the labor market." They concluded that they have not found evidence of AI usage leading to job losses, especially across white-collar occupations. "The productivity story seems to be winning, at least so far.""
"Lisa Shalett, chief investment officer for MS Wealth Management, previously told Fortune she was "very concerned" about bubbly conditions around AI, and reiterated in an October 1 research note that the rally is in its " seventh inning." Morgan Stanley's Global Investment Committee flagged three concerns on their mind as the ballgame nears its end: challenges in free cash flow growth among the so-called "hyperscalers," speculative deal-making and, finally, "slowing growth in key revenue segments.""
The bull market reached its third anniversary with AI identified as a primary rally driver and massive investment flowing into infrastructure. Investors and executives characterize the surge as an infrastructure boom fueled by expectations of large productivity gains and long-term payoff. Concerns have emerged about bubble formation, with some calling the trend an "infrastructure bubble" that may persist for years. Bank of America finds no clear evidence of AI-induced job losses and sees early productivity benefits. Other institutions, including Morgan Stanley, worry about hyperscaler cash flow, speculative deal-making, and slowing revenue growth.
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